Here is a simplified balance sheet for Locust Farming: Locust Farming Balance Sheet ($ in millions) Current assets $ 42,526 Current liabilities $ 29,753 Long-term assets 46,836 Long-term debt 27,754 Other liabilities 14,321 Equity 17,534 Total $ 89,362 Total $ 89,362 Locust has 659 million shares outstanding with a market price of $85 a share. Calculate the company’s market value added. Calculate the market-to-book ratio. How much value has the company created for its shareholders as a percent of shareholders’ equity, that is, as a percent of the net capital contributed by shareholders?
Here is a simplified balance sheet for Locust Farming: Locust Farming Balance Sheet ($ in millions) Current assets $ 42,526 Current liabilities $ 29,753 Long-term assets 46,836 Long-term debt 27,754 Other liabilities 14,321 Equity 17,534 Total $ 89,362 Total $ 89,362 Locust has 659 million shares outstanding with a market price of $85 a share. Calculate the company’s market value added. Calculate the market-to-book ratio. How much value has the company created for its shareholders as a percent of shareholders’ equity, that is, as a percent of the net capital contributed by shareholders?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Here is a simplified balance sheet for Locust Farming:
| Locust Farming | |||
| Balance Sheet | |||
| ($ in millions) | |||
| Current assets | $ 42,526 | Current liabilities | $ 29,753 |
| Long-term assets | 46,836 | Long-term debt | 27,754 |
| Other liabilities | 14,321 | ||
| Equity | 17,534 | ||
| Total | $ 89,362 | Total | $ 89,362 |
Locust has 659 million shares outstanding with a market price of $85 a share.
- Calculate the company’s market value added.
- Calculate the market-to-book ratio.
- How much value has the company created for its shareholders as a percent of shareholders’ equity, that is, as a percent of the net capital contributed by shareholders?
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